Has the U.S. real estate market become an archetype for a growing chasm between the haves and the have-nots?
The National Association of Realtors (NAR), in the 2011 profile of Home Buyers and Sellers revealed some interesting facts:
“Many of the demographics covered in the report show trends that have not been seen in the last 10 years. In the last two years, home buyers were urged into the market by the Home Buyer Tax Credit and record affordability. Buyers now are facing tighter credit standards and are typically only buyers with the very best credit – often without financing.”
The report goes on to say that, “This change is one that is so substantial, it is changing who purchases homes, who sells homes and how the home is financed.”
- In 2010, 50% of homebuyers were first time buyers. That dropped to only 37% in 2011
- In 2010, buyers were 39 years old on average – in 2011 that number rose to 45 years
- In 2010, the median household income of buyers was $80,900 – $62,400 for first-time buyers and $96,600 for repeat buyers
- 27% of recent home buyers indicated that owning a home was the reason behind their purchase, suggesting other reasons for the remaining buyers, i.e. job transfer, downsizing, etc.
Pew Research Center, on August 6th, 2012, noted a rise in what they term “residential segregation by income”:
“Residential segregation by income has increased during the past three decades across the United States and in 27 of the nation’s 30 largest major metropolitan areas , according to a new analysis of census tract and household income data by the Pew Research Center.
“The analysis finds that 28% of lower-income households in 2010 were located in a majority lower-income census tract, up from 23% in 1980, and that 18% of upper- income households were located in a majority upper-income census tract, up from 9% in 1980.
“These increases are related to the long-term rise in income inequality, which has led to a shrinkage in the share of neighborhoods across the United States that are predominantly middle class or mixed income — to 76% in 2010, down from 85% in 1980 — and a rise in the shares that are majority lower income (18% in 2010, up from 12% in 1980) and majority upper income (6% in 2010, up from 3% in 1980).”
Rather than concern themselves with what it takes to get elected (or re-elected in some peoples’ cases), our federal and state government representatives need to take on the real issues behind these statistics – education and business.
At the risk of becoming too political, a hard cut of bloated departments – i.e. DOE – allowing states to handle what goes on their classrooms is a good place to start.
As for business – here I go again – big business is NOT too big to fail – let ‘em reap their rewards for corruption and avarice. But I digress…
Call me a PollyAnna, but when businesses are allowed to operate as they should, punished SEVERELY when they knowingly err and educators’ hands aren’t tied by onerous requirements that inhibit creativity, perhaps we’ll see the gap begin to close. Yeah, I’m a dreamer…
What say you? How can we (and should we) do something about the fast disappearance of America’s middle class?